A daily stock analysis based on stock market today
  • Daily Roll
  • YouTube
  • Podcast
  • Investor Hubs
    • Starter Investors Hub
    • Dividend Seekers Hub
    • The Risk Hub
    • COVID-19 Investing Hub
  • Sign Up
  • Boot Camp

Two recent SPAC IPOs -SOFI and CLOV

6/23/2021

 

KEY POINTS

  • The NASDAQ stayed above water in a mixed market, with median home prices at record highs.
  • Started as a student loan platform, SoFi (SOFI) is now a challenger bank aiming to replace traditional banks with its one-stop-shop consumer finance products. 
  • Clover Health (CLOV) is slowly gaining ground but has a long way to go to reach its record high.

OVERALL MARKET

The NASDAQ stayed above water in a mixed market, with median prices of homes at record highs.
Picture
We ended the day with a mixed market. Both the S&P and DOW indices finished in the red, with the NASDAQ barely finishing above the green.

With uncertain and confusing Fed comments in the past week, investors look for more economic indicators to clarify the market's future. New data from the Commerce Department came out today. It tells us home buying has slowed, while the median price is as high as ever, another victim of supply chain issues and inflation. This serves as a reminder to the financial market that inflation is ever-present, possibly causing investor hesitation today.

GET THE DAILY MARKET RECAP

Did you know you can get your Daily Market recap report on YouTube, listen to it on our Podcast, or get it in your inbox?

Watch it,
Listen to it,
Or,  read it,

 Sign up for a free Stock Card account to get the report in your mailbox every day.
Give Stock Card A Try!

WHAT'S UP?

Started as a student loan platform, SoFi (SOFI) is now a challenger bank aiming to replace traditional banks with its one-stop-shop consumer finance products. 
Today's winner stock of the day is another suggestion by Stock Card’s VIP members. SoFi Technologies (SOFI) is a SPAC IPO that finished Wednesday up by more than 2%. In the past, SoFi was known only for school loan services. With their new CEO Anthony Noto in charge, the business pivoted to create a challenger bank offering a one-stop-shop technical platform for all your financial needs, from investing to loans to financial education, and more.

The company has reported seven quarters of faster year-over-year growth in member base. What distinguishes SoFi from other banks is its ability to acquire users at a much lower cost. Users may join SoFi to trade crypto and then graduate to get a loan or open an account. We've seen a similar low-cost customer acquisition from Square (SQ). With almost no physical presence this new generation bank has much lower operating costs. You can see the evidence of it in its rapidly improving Adjusted EBITDA (Earnings before Interest, Tax, Depreciation, and Amortization). 

Despite all positive signs, let's not forget thatSoFi’s plan for future growth relies on generating more revenue from their existing customers down the road. While they want to bring more people into the service, they ideally want to benefit from being a “one-stop-shop” for their paying customers. Upselling more products to the existing base may not be as easy as everybody assumes and end up taking too long or too much. 

One thing that makes me worried about SoFi is that it is diversifying to new financial products too fast. Each of the companies product offerings can be an independent company by itself with regulatory challenges and operational complexities. It also makes it hard to understand SoFi's operation well enough to jump in now. I could be regretting it later,  but this stock is still a watchlist candidate for me.  

WHAT'S DOWN?

Clover Health (CLOV) is slowly gaining ground but has a long way to go to reach its record high.
The second SPAC IPO suggested by VIP users is Clover Health (CLOV). Yesterday, the company saw a 20% jump in its share price, followed by another +9.5% today. Today though, we are stepping back to look at the bigger picture. Relatively speaking, this jump is only a fraction of the ground needing to be recovered from CLOV’s downtrend. 

June 8th was the height of the short squeeze craze, with Reddit traders sending the value up to $22 before a massive sell-off led to a drop to $13.85 today. The gains we saw today come from discussions surrounding an SEC filing by the company acknowledging the possibility of a squeeze. 

Aside from the short squeeze drama, Clover's product is interesting. It uses data and machine learning to assist physicians to make better decisions when they are diagnosing. The company works with 2K physicians so far. It also uses the same data and AI technology to provide a more accurate and less costly Medicare Advantage health insurance plan in 34 countries and has about 60K users. Of course, the market opportunity in the U.S. The Medicare market is quite large. And, Clover's plan is currently addressing the needs of only 3 million patients. This means there is a large market opportunity, and at the same time, it means Clover still has a lot of work to do to grow and expand its share in the market. With 2K doctors and 60K Medicare Advantage members, it almost feels it was too early for Clover to go public and it still needed more time to establish its business. But, I guess, that's what SPAC mergers are for. You go public and get access to capital much sooner than a traditional IPO. 

For me, it just feels too early to assume Clover can take over shares from the likes of UnitedHealth (UNH). If it does, it would be an excellent investment for a long time. I rather wait a bit to let Clover grow a bit more before jumping in. 

WANT TO RECIEVE THIS DAILY STOCK MARKET RECAP REPORT IN YOUR MAILBOX?

Sign up for a free account on Stock Card's website to get the daily market recap reports in your inbox:
Give Stock Card A Try!

Comments are closed.

    RSS Feed


    Archives

    December 2022
    September 2022
    July 2022
    February 2022
    November 2021
    October 2021
    September 2021
    August 2021
    July 2021
    June 2021
    May 2021
    April 2021
    February 2021
    October 2020
    September 2020
    August 2020
    July 2020
    June 2020
    May 2020
    April 2020
    March 2020
    January 2020
    October 2019
    July 2019
    June 2019
    May 2019
    April 2019
    March 2019
    February 2019
    January 2019
    December 2018
    November 2018
    October 2018
    September 2018
    August 2018
    July 2018
    June 2018
    May 2018
    April 2018
    March 2018
    February 2018
    January 2018
    December 2017
    November 2017

    Categories

    All
    Battle
    Education
    ETF Investing
    How To Invest
    New Podcast Episode
    New Portfolio
    Portfolio Update
    Starter 2020
    Stock Card VIP Pick
    Stock Lists
    The Daily Hype
    Update
    Watchlist Worthy
    Winners And Losers

© 2023 StockCard.io. All Rights Reserved.
​​
Disclaimer: StockCard.io is not, neither operated by a broker, a dealer, or a registered investment adviser. Under no circumstances does any information posted on StockCard.io and Stock Card Weekly represent a recommendation to buy or sell a security. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The Stock Card team may buy and sell securities before and after any particular article and report and information herein is published, with respect to the securities discussed in any article and report posted herein. In no event shall StockCard.io be liable to any subscriber, visitor, guest or third party for any damages of any kind arising out of the use of any content or other material published or available on StockCard.io, or relating to the use of, or inability to use, StockCard.io or any content, including, without limitation, any investment losses, lost profits, lost opportunity, special, incidental, indirect, consequential or punitive damages. Past performance is a poor indicator of future performance. The information on this site, and in its related newsletters, is not intended to be, nor does it constitute, investment advice or recommendations. The information on this site is in no way guaranteed for completeness, accuracy or in any other way.
  • Daily Roll
  • YouTube
  • Podcast
  • Investor Hubs
    • Starter Investors Hub
    • Dividend Seekers Hub
    • The Risk Hub
    • COVID-19 Investing Hub
  • Sign Up
  • Boot Camp